TaxTMI 
TaxTMI 
2014 (11) TMI 350
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....urse of search, certain documents belonging to the assesseesociety were seized. Subsequently, notices u/s. 153C were issued to the assessee who filed its returns of income for A.Ys. 2007-08 and 2008-09 on 1.10.2010 admitting nil income for both the assessment years and for A.Y. 2009-10 the assessee admitted loss of Rs. 1,73,054. 4. Assessment order u/s. 143(3) r.w.s. 153C was passed on 24.12.2010 adding an amount of Rs. 12,50,000 being anonymous donations u/s. 115BBC of Income-tax Act, 1961 for A.Y. 2007-08. 5. The assessee society was formed on 30.1.2006. During the year relevant to the A.Y. 2007-08, the assessee AOP started construction of a college. It was noticed from the Receipts & Payments A/c. that the society was in receipt of unsecured loans, loan on FDR and also corpus donations of Rs. 12,50,000. The entire amount received under these heads was invested in FDs and construction of the building. During the assessment proceedings, it was noticed that 43 persons have contributed amounts ranging from Rs. 23,000 to Rs. 25,000, which totalled to Rs. 12,50,000. The society claimed that since they have filed the names and addresses of the donors, the corpus donation shall not be....
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.... five per cent of the total donations received by the assessee: or (B) one lakh rupees'. He held that this section has been brought into the statute book by the Finance Act, 2006 with a view to prevent channelization of unaccounted money to trusts and other institutions by way of anonymous donations. Hence, the term anonymous has to be read in a manner so as to include unaccounted money. He observed that the contention of the assessee that mere submission of names and addresses of alleged donors is enough to satisfy the requirement of Section 115BBC is misplaced and misleading and the purpose behind the section is to prevent unaccounted money being introduced in the books of trusts as tax exempt donations. Hence, he concluded that the principles applied in the case of unexplained cash credits shall also apply in the case of anonymous donations u/s. 115BBC. The CIT(A) pointed out that the burden of proof on the assessee society does not shift merely by submission of the names and addresses of the donors but the recipient society should also be in a position to identify the donor, and establish his capacity to give a donation of the amount mentioned against his name. It was sated....
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....10. The assessee filed appeal before the Tribunal. The learned AR reiterated the arguments assessee made before the Revenue authorities. 11. The learned DR relied on the orders of the Assessing Officer and the CIT(A). 12. We have heard both parties and perused the material on record. We find that the names of the donors along with their addresses were furnished before the Investigation Wing of the department and were also recorded in the books produced by the assessee before the Assessing Officer. Hence such donations cannot be classified as "anonymous donations" as per the provisions of section 115BBC(3) of the Act. Section 115BBC(3) is as under: 115BBC. (1) ... (2) (3) For the purposes of this section, "anonymous donation" means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed.] 13. Hence, we are of the opinion that the only requirement u/s. 115BBC(3) is that the names and addresses of the donors are to be recorded. The learned CIT(A....
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....Rs. 21,30,000 failed to appreciate the fact that the Assessing Officer himself in his order at para 1 page 2 admitted that the list of persons (donor) and their addressed were furnished before him. 3. The learned First Appellate Authority is not Justified in confirming the addition of Rs. 21,30,000 on the ground that the record of donor was not available at the time of search, ignoring the very fact that all the details were filed in the course of assessment proceedings before the Assessing Officer, as acknowledged in the assessment order. 4. The learned First Appellate Authority failed to appreciate the legal position that appellant maintained and produced before the Assessing Officer the record of identity indicating the name and address of the donor, such donations cannot be classified as "Anonymous donation" as per the provisions of s. 158BBC(3) of the IT Act. 5. The learned First Appellate Authority failed to appreciate that the Assessing Officer, in spite of having all the information on record made the addition without bringing on record anything contradicting the said details. 6. The learned Commissioner of Income-tax (Appeals) is not justified in confirming the additio....
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....able. 20. Hence, the Assessing Officer treated the entire corpus donation of Rs. 36,22,500/- as anonymous donations under section 115BBC of the Act and added this amount back to the returned income. 21. During the appellate proceedings, it has been submitted by the assessee society as under: "The figure of Rs. 36,22,500 consisted of the following three different Items: (a) Donations of Rs. 21,30,000 by 85 persons (b) Corpus/Building fund of Rs. 14,82,500 paid by 228 students; and (c) Donation of Rs. 10,000 by Dr. B. Manoharamma, w/o. Sri K. Ramachander, Joint Secretary of the Assessee Society by SBI crossed cheque No. 658504. In regard to item (a) above, i.e., donations of Rs. 21,30,000, the details of donations from 85 persons were furnished during the course of assessment proceedings. A copy of the list is enclosed for perusal. In regard to item (b) i.e., Corpus/Building fund of Rs. 14,82,500, the list of 228 students, who contributed to corpus/building fund, amounting to Rs. 14,82,500 was also submitted to the Assessing Officer. A copy of the list is enclosed for perusal. In view of the above, the addition u/s. 115BBC is unwarranted and unjustified since names of donors....
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....8 students with roll number and date of deposit has been submitted as well as the Engineering Branch in which such student had sought and obtained admission. Each student has paid Rs. 6,500/Rs. 6,000 and the payment is stated to be towards corpus/building fund. The CIT(A) was of the opinion that the assessee's contention is correct and the above cannot be treated as an anonymous donation. In view of the same, he deleted the addition of Rs. 14,92,500 on account of anonymous donation u/s. 115BBC. Accordingly, he allowed Ground No. l partly. 25. Aggrieved, the assessee is in appeal before us in respect of addition of Rs. 21,30,000. 26. The learned counsel for the assessee brought to our notice that the record of donors has been acknowledged in the assessment order itself by the Assessing Officer and hence submitted that the CIT(A) is incorrect in his statement that the record of donors was not available at the time of search. As in the A.Y. 2007-08, since the assessee maintained and produced before the Assessing Officer, the record of identity indicating names and addresses of the donors, in our opinion such donations cannot be classified as anonymous donations as per the provi....
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....sment year. The assessee society is running an engineering college and the income from the same has to be treated as income from business and all provisions applicable to business income shall apply in the case of the assessee. In view of the same, he held that the addition made by the Assessing Officer is correct and sustained the same. Accordingly, the CIT(A) dismissed this ground. Aggrieved, the assessee is in appeal before us. 30. We find that during the assessment proceedings, the total receipts reflected in the Income & Expenditure Statement as tuition fees was Rs. 82,89,000. It was held by the Assessing Officer that during the course of search & seizure operations certain receipt books are found and seized and placed in the Annexure A/RAM/Res/PO34. On examination of seized material the receipts between 02.10.2007 and 20.10.2007 has not been accounted. The details are as under: Date Amount (Rs.) 02.10.2007 86000 03.10.2007 86000 04.10.2007 86000 05.10.2007 86000 06.10.2007 86000 06.10.2007 86000 07.10.2007 86000 10.10.2007 86000 11.10.2007 86000 11.10.2007 86000 12.10.2007 86000 12.10.2007 61000 12.10.2007 60000 12.10.2007 70000 13.10.2007 560....
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....t Rs. 82,89,000 and if the suppression of the receipts which totals to Rs. 18,24,000 is being reduced on verification by the Assessing Officer then the total receipts might figure at less than Rs. 1 crore, which would entitle the assessee for the benefit of section 10(23C). Hence, we direct the Assessing Officer to work out the same and decide the issue in accordance with law. 35. Therefore, with reference to ground No. 6, we are of the opinion that if the assessee is exempted u/s. 10(23C) the income is not computed under ss. 30 to 38 in order to attract disallowance u/s. 40(a)(ia). Hence the AO shall decide this ground after giving a finding with reference to exemption u/s. 10(23C). 36. Ground No. 8 is with respect to confirmation of addition of Rs. 3,57,569 representing capital expenditure. The assessee submitted that exemption has been claimed u/s. 10(23C)(iiiad) which states that income received from any university or other educational institution existing solely for educational purposes will not form part of the total income. We remit this issue to the file of the Assessing Officer to decide the same after giving a finding about the eligibility of the assessee for exemption ....
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.... enclosed to the confirmation letter. It is, therefore, prayed that the Hon'ble Commissioner of Income Tax (Appeals) be pleased to admit the fresh evidence in the interests of justice and direct the learned Assessing Officer to delete the addition of Rs. 10 lakhs u/s. 68." 40. The CIT(A) held that the assessee society has claimed that the creditor had agricultural income and has furnished copies of pattadar pass book of the said creditor, which indicate that he has approximately 3 acres of land. The CIT(A) observed that the assessee society has claimed that the creditor also received compensation from Government for acquisition of agricultural land. However, no evidence of such payment of compensation has been filed. Further, the CIT(A) observed that the bank account passbook asked for by the A.O. has neither been filed at the assessment stage or at the appellate stage and from 3 acres of land, it is doubtful whether the creditor could have generated agricultural income of the magnitude, that would allow him to maintain his family and also generate enough surplus to give credit to the assessee society. It was further pointed out that the claim of compensation received from th....